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Dollar General
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Dollar General is a chain of variety stores operating in 35 U.S. states. The chain operates about 8,205 stores (as of June 1, 2007), and its headquarters is located in Goodlettsville, Tennessee, a suburb of Nashville. As of the third fiscal quarter of 2007, the company was acquired by Kohlberg Kravis Roberts & CO (KKR), a private equity firm, who intends to take the company back to privately-owned status.
The stores were founded in 1939 by Cal Turner in Scottsville, Kentucky.
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Encyclopedia
Dollar General is a chain of variety stores operating in 35 U.S. states. The chain operates about 8,205 stores (as of June 1, 2007), and its headquarters is located in Goodlettsville, Tennessee, a suburb of Nashville. As of the third fiscal quarter of 2007, the company was acquired by Kohlberg Kravis Roberts & CO (KKR), a private equity firm, who intends to take the company back to privately-owned status.
The stores were founded in 1939 by Cal Turner in Scottsville, Kentucky. Turner was illiterate and later created a Literacy Fund which helps people learn to read; the fund donates computers and books to local schools and libraries.
Dollar General stores are typically in small shopping plazas or strip malls in local neighborhoods. The company acquired the 280 stores of the P.N. Hirsh Division of Interco, Inc. (now Furniture Brands International, Inc.) in 1983 and in 1985 added 206 stores and a warehouse from Eagle Family Discount Stores, also from Interco, Inc. In recent years, the chain has started constructing more stand-alone stores, typically in areas not served by another general-merchandise retailer. In some cases, stores are within a few city blocks of each other.
Dollar General offers both name brand and generic merchandise — including off-brand goods and closeouts of name-brand items — in the same store, often on the same shelf.
Although it has the word "dollar" in the name, Dollar General is not a dollar store in the strict sense of the phrase, because it has goods that are priced at more (or less) than a dollar. However, goods are usually sold at set price points of penny items and up to the range of 50 to 60 dollars, not counting phone cards, trac fone minutes, and loadable store gift cards.
Dollar General typically serves communities that are too small for Wal-Marts. It competes in the dollar store format with national chains Family Dollar and Dollar Tree, regional chains such as Fred's in the southeast, and numerous independently owned stores.
Since the turn of the century, Dollar General has experimented with stores that carry a greater selection of grocery items. These stores (similar to the Wal-Mart Supercenter, but much smaller) operate under the name "Dollar General Market".
Recently, Dollar General began selling produce, meat, and baked goods in new stores called "Super Dollar Generals" in former
supermarket locations, even though this idea is similar to the Dollar General Market.
When the first Dollar General store opened in Scottsville, Kentucky, on June 1, 1955, the concept was that no item in the store would cost more than one dollar. The idea became a success, and other stores owned by J.L. Turner and his son Cal Turner were quickly converted. By 1957, annual sales of Dollar General’s 29 stores were $5 million.
The Turners did not reach this level of success without obstacles. James Luther (J.L.) Turner’s father died in an accident in 1902 when J.L. was only 11. J.L. had to quit school so he could work the family farm and help provide for his mother and siblings. He never completed his education. J.L. knew his limited education demanded that he become a quick study of the world around him.
After two unsuccessful attempts at retailing, J.L. became a traveling dry goods salesman for a Nashville wholesale grocer. J.L. left the sales job after 10 years and settled his family in Scottsville, Kentucky. During the Depression, he began buying and liquidating bankrupt general stores. J.L.’s only child, Cal Turner, Sr., accompanied his father to these closeouts at a young age, gaining valuable business knowledge and skills.
In October 1939, J.L. and Cal opened J.L. Turner and Son Wholesale with an initial investment of $5,000 each. Wholesaling quickly gave way to retailing – J.L.’s third and final attempt at retailing. The switch to retailing resulted in annual sales above $2 million by the early 1950s and the rest is history.
J.L. died in 1964. Four years later, the company he co-founded went public as Dollar General Corporation, posting annual sales of more than $40 million and net income in excess of $1.5 million. In 1977, Cal Turner, Jr., who joined the company in 1965 as the third generation Turner, succeeded his father as president of Dollar General. Cal Jr. led the company until his retirement in 2002. Under his leadership, the company grew to more than 6,000 stores and $6 billion in sales.
Acquisition
Dollar General is no longer a publicly traded company. On July 6, 2007, all shares of Dollar General stock were acquired by private equity investors for $22.00 per share. An investment group consisting of affiliates of Kohlberg Kravis Roberts (KKR), GS Capital Partners (an affiliate of Goldman Sachs), Citigroup Private Equity and other co-investors completed an acquisition of Dollar General Corporation for a total enterprise value of $7.3 billion.
As a part of the transition to a privately held company, Dollar General is assessing each location as leases run out against a model known as "EZ Stores". This assessment includes evaluating whether the location has a loading dock, garbage dumpsters, adequate parking, and acceptable profitability. Stores that do not pass this evaluation are closed. Over 400 stores have been closed already as part of this initiative.
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